WAFD Butterfly Strategy
WAFD (WaFd, Inc.), in the Financial Services sector, (Banks - Regional industry), listed on NASDAQ.
WaFd, Inc. delivers a comprehensive suite of banking and financial services, encompassing lending, deposit accounts, and insurance, primarily catering to individual consumers. Beyond retail banking, the company also serves the financial needs of mid-sized to large businesses, as well as owners and developers within the commercial real estate sector. Established on November 15, 1994, WaFd, Inc. maintains its headquarters in Seattle, Washington.
WAFD (WaFd, Inc.) trades in the Financial Services sector, specifically Banks - Regional, with a market capitalization of approximately $2.79B, a trailing P/E of 10.88, a beta of 0.83 versus the broader market, a 52-week range of 26.31-39.49, average daily share volume of 619K, a public-listing history dating back to 1982, approximately 2K full-time employees. These structural characteristics shape how WAFD stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.83 places WAFD roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. The trailing P/E of 10.88 is on the value side, where IV often compresses outside event windows because forward growth expectations are already discounted into the share price. WAFD pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on WAFD?
A long call butterfly buys one lower-strike call, sells two ATM calls, and buys one higher-strike call, paying a small net debit for a defined-risk position that maxes out if the underlying pins the middle strike at expiration.
WAFD snapshot
As of August 14, 2026, spot at $37.91, ATM IV 40.00%, IV rank 12.41%, expected move 11.47%. The butterfly on WAFD below is built from the end-of-day chain, with strikes snapped to listed contracts and premiums pulled from the bid/ask midpoint at a 35-day expiry.
Why this butterfly structure on WAFD specifically: WAFD IV at 40.00% is on the cheap side of its 1-year range, which favors premium-buying structures like a WAFD butterfly, with a market-implied 1-standard-deviation move of approximately 11.47% (roughly $4.35 on the underlying). The 35-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated WAFD expiries trade a higher absolute premium for lower per-day decay. Position sizing on WAFD should anchor to the underlying notional of $37.91 per share and to the trader's directional view on WAFD stock.
WAFD butterfly setup
The WAFD butterfly below is built from the end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With WAFD at $37.91 on that close, the first option leg uses a $36.01 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed WAFD chain at a 35-day expiry; the cross-strike IV skew is reflected directly in the per-leg values rather than approximated. Quantity sizing assumes one contract per option leg (or 100 WAFD shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $36.01 | N/A |
| Sell 2 | Call | $37.91 | N/A |
| Buy 1 | Call | $39.81 | N/A |
WAFD butterfly risk and reward
- Net Premium / Debit
- N/A
- Max Profit (per contract)
- Unbounded
- Max Loss (per contract)
- Unbounded
- Breakeven(s)
- None on modeled curve
- Risk / Reward Ratio
- N/A
Max profit equals the wing width minus net debit times 100 (reached when the underlying pins the middle strike); max loss equals the net debit times 100. Two breakevens at lower-wing plus debit and upper-wing minus debit.
WAFD butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on WAFD. Each row is one sampled price point from the computed payoff curve; the full curve uses 200 price points internally before being summarized into 10 rows here.
When traders use butterfly on WAFD
Butterflies on WAFD are pinning bets - traders use them when they expect WAFD to settle near a specific level at expiration (often the prior close, a round number, or the max-pain strike) and want defined-risk exposure to that outcome.
WAFD thesis for this butterfly
The market-implied 1-standard-deviation range for WAFD extends from approximately $33.56 on the downside to $42.26 on the upside. A WAFD long call butterfly is a pinning play: it pays maximum at the middle strike if WAFD settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current WAFD IV rank near 12.41% sits in the lower third of its 1-year distribution, where IV often re-expands toward the mean; this favors premium-buying structures and disadvantages premium-selling structures on WAFD at 40.00%. As a Financial Services name, WAFD options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to WAFD-specific events.
WAFD butterfly positions are structurally neutral / pin (limited-risk, limited-reward); the modeled P&L assumes European-style exercise at expiration and ignores early assignment, transaction costs, dividends paid before expiry on the stock leg (when present), and the bid-ask spread on the listed chain. WAFD positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move WAFD alongside the broader basket even when WAFD-specific fundamentals are unchanged. Always rebuild the position from current WAFD chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on WAFD?
- A butterfly on WAFD is the butterfly strategy applied to WAFD (stock). The strategy is structurally neutral / pin (limited-risk, limited-reward): A long call butterfly buys one lower-strike call, sells two ATM calls, and buys one higher-strike call, paying a small net debit for a defined-risk position that maxes out if the underlying pins the middle strike at expiration. With WAFD stock at $37.91 on the most recent close, the strikes shown on this page are snapped to the nearest listed WAFD chain strike and the premiums come straight from that session's bid/ask midpoint.
- How are WAFD butterfly max profit and max loss calculated?
- Max profit equals the wing width minus net debit times 100 (reached when the underlying pins the middle strike); max loss equals the net debit times 100. Two breakevens at lower-wing plus debit and upper-wing minus debit. For the WAFD butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 40.00%), the computed maximum profit is unbounded per contract and the computed maximum loss is unbounded per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a WAFD butterfly?
- The breakeven for the WAFD butterfly priced on this page is no defined breakeven on the modeled curve at expiration, derived from the end-of-day chain's premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The WAFD market-implied 1-standard-deviation expected move in the same options snapshot is approximately 11.47%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on WAFD?
- Butterflies on WAFD are pinning bets - traders use them when they expect WAFD to settle near a specific level at expiration (often the prior close, a round number, or the max-pain strike) and want defined-risk exposure to that outcome.
- How does current WAFD implied volatility affect this butterfly?
- WAFD ATM IV is at 40.00% with IV rank near 12.41%, which is on the low end of its 1-year range. Premium-buying structures (long call, long put, debit spreads) are relatively cheap in this regime; premium-selling structures collect less credit per unit risk.